Federal Register / Vol. 72, No. 185 / Tuesday, September 25, 2007 / Rules and Regulations 54347 

1Section 10(d) of the FDI Act was added by 

section 111 of the Federal Deposit Insurance 

Corporation Improvement Act of 1991 (FDICIA) and 

is codified at 12 U.S.C. 1820(d). 

It is further found that good cause 

exists for not postponing the effective 

date of this rule until 30 days after 

publication in the Federal Register (5 

U.S.C. 553) because the 2007–08 crop 

year began on August 1, 2007, and this 

action must be in place by the time the 

Committee meets to consider whether 

volume regulation is warranted for 

2007–08 NS raisins (on or before 

October 5, 2007). Further, handlers are 

aware of this rule, which was 

unanimously recommended at a public 

meeting. Also, a 15-day comment period 

was provided for in the proposed rule 

and no comments were received. 

List of Subjects in 7 CFR Part 989 

Grapes, Marketing agreements, 

Raisins, Reporting and recordkeeping 

requirements. 

■ For the reasons set forth in the 

preamble, 7 CFR part 989 is amended as 

follows: 

PART 989—RAISINS PRODUCED 

FROM GRAPES GROWN IN 

CALIFORNIA 

■ 1. The authority citation for 7 CFR 

part 989 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. Section 989.154, paragraph (b) is 

revised to read as follows: 

§ 989.154 Marketing policy computations. 

* * * * * 

(b) Estimated trade demand. Pursuant 

to § 989.54 (e)(4), estimated trade 

demand is a figure different than the 

trade demand computed according to 

the formula in § 989.54(a). The 

Committee shall use an estimated trade 

demand to compute preliminary and 

interim free and reserve percentages, or 

determine such final percentages for 

recommendation to the Secretary for 

2007–08 crop Natural (sun-dried) 

Seedless (NS) raisins if the crop 

estimate is equal to, less than, or no 

more than 10 percent greater than the 

computed trade demand: Provided, That 

the final reserve percentage computed 

using such estimated trade demand 

shall be no more than 10 percent, and 

no reserve shall be established if the 

final 2007–08 NS raisin crop estimate is 

less than 215,000 natural condition 

tons. 

Dated: September 20, 2007. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 07–4722 Filed 9–20–07; 1:38 pm] 

BILLING CODE 3410–02–P 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Part 4 

[Docket ID OCC–2007–00014] 

RIN 1557–AD02 

FEDERAL RESERVE SYSTEM 

12 CFR Parts 208 and 211 

[Docket No. R–1279] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Parts 337 and 347 

RIN 3064–AD17 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

12 CFR Part 563 

[Docket ID OTS–2007–0011] 

Expanded Examination Cycle for 

Certain Small Insured Depository 

Institutions and U.S. Branches and 

Agencies of Foreign Banks 

AGENCIES: Office of the Comptroller of 

the Currency (OCC); Board of Governors 

of the Federal Reserve System (Board); 

Federal Deposit Insurance Corporation 

(FDIC); and Office of Thrift Supervision 

(OTS), Treasury. 

ACTION: Final rules. 

SUMMARY: The OCC, Board, FDIC, and 

OTS (collectively, the Agencies) are 

jointly adopting as final the interim 

rules issued on April 10, 2007, that 

implemented section 605 of the 

Financial Services Regulatory Relief Act 

of 2006 (FSRRA) and related legislation 

(collectively the Examination 

Amendments). The Examination 

Amendments permit insured depository 

institutions (institutions) that have up to 

$500 million in total assets, and that 

meet certain other criteria, to qualify for 

an 18-month (rather than 12-month) onsite examination cycle. Prior to 

enactment of FSRRA, only institutions 

with less than $250 million in total 

assets were eligible for an 18-month onsite examination cycle. The interim 

rules made parallel changes to the 

Agencies’ regulations governing the onsite examination cycle for U.S. branches 

and agencies of foreign banks (foreign 

bank offices), consistent with the 

International Banking Act of 1978 (IBA). 

In addition to implementing the changes 

in the Examination Amendments, the 

interim rules clarified when a small 

insured depository institution is 

considered ‘‘well managed’’ for 

purposes of qualifying for an 18-month 

examination cycle. 

DATES: Effective on September 25, 2007, 

the Interim Rules published on April 10, 

2007 (72 FR 17798) are adopted as final 

without change. 

FOR FURTHER INFORMATION CONTACT:

OCC: Mitchell Plave, Counsel, 

Legislative and Regulatory Activities 

Division, (202) 874–5090; Stuart E. 

Feldstein, Assistant Director, Legislative 

and Regulatory Activities, (202) 874–

5090; Fred Finke, Mid-size/Community 

Bank Supervision, (202) 874–4468; 

Patricia Roberts, Operational Risk Policy 

Analyst, (202) 874–5637. 

Board: Barbara Bouchard, Deputy 

Associate Director, (202) 452–3072, 

Mary Frances Monroe, Manager, (202) 

452–5231, or Stanley Rediger, 

Supervisory Financial Analyst, (202) 

452–2629, Division of Banking 

Supervision and Regulation; or Pamela 

G. Nardolilli, Senior Counsel, (202) 

452–3289, for the revisions to 

Regulation H, or Jon Stoloff, Senior 

Counsel, (202) 452–3269, for the 

revisions to Regulation K, Legal 

Division. For users of 

Telecommunication Device for the Deaf 

(TDD) only, contact (202) 263–4869. 

FDIC: Melinda West, Senior 

Examination Specialist, (202) 898–7221; 

Patricia A. Colohan, Senior Examination 

Specialist, (202) 898–7283; Division of 

Supervision and Consumer Protection; 

Rodney D. Ray, Counsel, (202) 898–

3556, for the revisions to 12 CFR Part 

347; Kimberly A. Stock, Senior 

Attorney, (202) 898–3815, for the 

revisions to 12 CFR Part 337; Legal 

Division. 

OTS: Robyn H. Dennis, Director, 

Operation Risk, (202) 906–5751, 

Examinations and Supervision Policy 

Office of Thrift Supervision, 1700 G 

Street, NW., Washington, DC 20552. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 10(d) of the Federal Deposit 

Insurance Act (the FDI Act) 1 generally 

requires that the appropriate Federal 

banking agency for an insured 

depository institution conduct a fullscope, on-site examination of the 

institution at least once during each 12- 

month period. Prior to enactment of 

FSRRA, section 10(d) also authorized 

the appropriate Federal banking agency 

to lengthen the on-site examination 


yshivers on PROD1PC62 with RULES
54348 Federal Register / Vol. 72, No. 185 / Tuesday, September 25, 2007 / Rules and Regulations 

2Under section 10(d) of the FDI Act, before 

enactment of the Examination Amendments, the 

Agencies had the authority to allow an institution 

with assets of more than $100 million (but less than 

$250 million) and a composite CAMELS rating of 

2 to qualify for an extended 18-month examination 

cycle if the Agencies determined that extending the 

18-month cycle in this manner would be consistent 

with safety and soundness. See 12 U.S.C. 

1820(d)(10). The Agencies exercised this discretion 

in 1997 and extended the 18-month examination 

cycle to 2-rated institutions with assets of more 

than $100 million (but less than $250 million). See 

62 FR 6449, Feb. 12, 1997 (interim rule); see also 

63 FR 16377, April 2, 1998 (final rule). 

3See 12 CFR 4.6 and 4.7 (OCC), 12 CFR 208.64 

and 211.26 (Board), 12 CFR 337.12 and 347.211 

(FDIC), and 12 CFR 563.171 (OTS). 

4Pub. L. 109–351, 120 Stat. 1966 (2006). 

5 120 Stat. 3561 (2007). 

6 72 FR 17798, April 10, 2007. 

7CAMELS is an acronym that is drawn from the 

first letters of the individual components of the 

rating system: Capital adequacy, Asset quality, 

Management, Earnings, Liquidity, and Sensitivity to 

market risk. 

8The four components of the ROCA supervisory 

rating system for foreign bank offices are: Risk 

management, Operational controls, Compliance, 

and Asset quality. 

9One commenter indicated that it would support 

increasing the total asset threshold in section 10(d) 

to $1 billion. The Agencies note that section 10(d) 

of the FDI Act currently does not allow the 

Agencies to raise the asset threshold above $500 

million. 

cycle for an institution to 18 months if 

the institution (1) Had total assets of less 

than $250 million; (2) was well 

capitalized (as defined for purposes of 

the prompt corrective action statute at 

12 U.S.C. 1831o); (3) was found, at its 

most recent examination, to be well 

managed and to have a composite 

condition of outstanding or good; 2 (4) 

had not undergone a change in control 

during the previous 12-month period in 

which a full-scope, on-site examination 

otherwise would have been required; 

and (5) was not subject to a formal 

enforcement proceeding or order by its 

appropriate Federal banking agency or 

the FDIC. The Board, the FDIC and the 

OTS, as the appropriate Federal banking 

agencies for state-chartered insured 

banks and savings associations, are 

permitted to conduct on-site 

examinations of such institutions on 

alternating 12-month or 18-month 

schedules with the institution’s State 

supervisor, if the Board, FDIC, or OTS, 

as appropriate, determines that the 

alternating examination conducted by 

the State carries out the purposes of 

section 10(d) of the FDI Act and, if 

relevant, the Home Owners’ Loan Act. 

In addition, section 7(c)(1)(C) of the 

IBA provides that a U.S. branch or 

agency of a foreign bank shall be subject 

to on-site examination by its appropriate 

Federal banking agency as frequently as 

a national or State bank would be 

subject to such an examination by the 

agency. The Agencies have adopted 

regulations to implement the 

examination cycle requirements of 

section 10(d) of the FDI Act and section 

7(c)(1)(C) of the IBA, including the 

extended 18-month examination cycle 

available to qualifying small institutions 

and foreign bank offices.3

Section 605 of FSRRA, which became 

effective on October 13, 2006, amended 

section 10(d) of the FDI Act to raise, 

from $250 million to $500 million, the 

total asset threshold below which an 

insured depository institution may 

qualify for an 18-month (rather than a 

12-month) on-site examination cycle.4

Public Law 109–473, which became 

effective on January 11, 2007, also 

amended section 10(d)(10) of the FDI 

Act to authorize the appropriate agency, 

if it determines the action would be 

consistent with principles of safety and 

soundness, to allow an insured 

depository institution that falls within 

this expanded total asset threshold to 

qualify for an 18-month examination 

cycle if the institution received a 

composite rating of outstanding or good 

at its most recent examination.5

The Examination Amendments will 

allow the Agencies to better focus their 

supervisory resources on those 

institutions that may present capital, 

managerial, or other issues of 

supervisory concern, while 

concomitantly reducing the regulatory 

burden on small, well capitalized and 

well managed institutions. The 

Agencies will continue to use off-site 

monitoring tools to identify potential 

problems in smaller, well capitalized 

and well managed institutions that 

present low levels of risk. Moreover, 

neither the statute nor the Agencies’

regulations limit, and the Agencies 

therefore retain, the authority to 

examine an insured depository 

institution or foreign bank office more 

frequently than would be required by 

the FDI Act or IBA. 

II. Interim Rule and Comments 

On April 10, 2007, the Agencies 

published and requested comment on 

interim rules to implement the 

Examination Amendments.6 In 

particular, the Agencies amended their 

respective rules to raise, from $250 

million to $500 million, the total asset 

threshold below which an insured 

depository institution that meets the 

qualifying criteria in section 10(d) and 

the Agencies’ rules may qualify for an 

18-month on-site examination cycle. In 

addition, as authorized by the 

Examination Amendments, the 

Agencies determined that it is 

consistent with safety and soundness to 

permit institutions with between $250 

million and $500 million in total assets 

that received a composite rating of 1 or 

2, which corresponds to ‘‘outstanding’’

and ‘‘good’’ respectively, under the 

Uniform Financial Institutions Rating 

System (commonly referred to as 

CAMELS),7 and that meet the other 

qualifying criteria set forth in section 

10(d) and the Agencies’ rules, to qualify 

for an 18-month examination cycle. 

Consistent with section 7(c)(1)(C) of the 

IBA, the OCC, Board and FDIC also 

made conforming changes to their 

regulations governing the on-site 

examination cycle for the U.S. branches 

and agencies of foreign banks. These 

changes permit a foreign bank office 

with total assets of less than $500 

million to qualify for an 18-month 

examination cycle if the office received 

a composite ROCA rating of 1 or 2 at its 

most recent examination.8

In connection with these changes, the 

Agencies also modified their rules to 

specify that a small institution meets the 

statutory ‘‘well managed’’ criteria for an 

18-month cycle if the institution, 

besides having a CAMELS composite 

rating of 1 or 2, also received a rating 

of 1 or 2 for the management component 

of the CAMELS rating at its most recent 

examination. 

The Agencies received comments on 

the interim rules from 11 commenters, 

although many commenters submitted 

identical letters to each Agency. 

Comments were submitted by six 

banking trade associations, four insured 

depository institutions, and one law 

firm. All commenters supported the 

interim rules. Commenters generally 

agreed that the rules would 

appropriately reduce regulatory burden 

for qualifying small institutions and 

foreign offices without creating undue 

risk to the institutions, officers or the 

deposit insurance fund.9

After carefully reviewing the 

comments and for the reasons set forth 

above and in the SUPPLEMENTARY

INFORMATION to the interim rules, the 

Agencies have determined to make final 

the interim rules as published in April 

2007. 

The Agencies estimate that the final 

rules, like the interim rules, will 

increase the number of insured 

depository institutions that may qualify 

for an extended 18-month examination 

cycle by approximately 1,089 

institutions, for a total of 6,670 insured 

depository institutions. Approximately 

126 foreign branches and agencies 

would be eligible for the extended 


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Federal Register / Vol. 72, No. 185 / Tuesday, September 25, 2007 / Rules and Regulations 54349 

10 Data are as of June 30, 2006, and reflect the 

number of institutions and foreign bank offices with 

total assets of less than $500 million. 

11 44 U.S.C. 3506; 5 CFR 1320, Appendix A.1. 

12Pub. L. 104–4, 109 Stat. 48 (March 22, 1995) 

(Unfunded Mandates Act). 

examination cycle based on the interim 

rules, for an increase of 31 offices.10

The FDI Act and the IBA set the 

outside limits within which an on-site 

safety and soundness examination of an 

institution or foreign bank office must 

commence, and permit the appropriate 

Agency for an institution or foreign 

bank to conduct an on-site examination 

more frequently than required. The 

Agencies’ rules continue to expressly 

recognize that the appropriate Agency 

may examine an institution or foreign 

bank office as frequently as the Agency 

deems necessary. 

Regulatory Flexibility Act 

The final rules do not impose any 

new obligations, restrictions or burdens 

on banking organizations, including 

small banking organizations, and, 

indeed, reduce regulatory burden 

associated with on-site examinations for 

qualifying small institutions and foreign 

bank offices. For these reasons, the 

Agencies certify that the final rules will 

not have a significant impact on a 

substantial number of small entities, as 

defined in the Regulatory Flexibility 

Act, 5 U.S.C. 601 et seq., and therefore 

a regulatory flexibility analysis is not 

required. The objective and legal basis 

for the rules are discussed in the 

Supplementary Information. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995,11 the Agencies 

have determined that no collections of 

information pursuant to the Paperwork 

Reduction Act are contained in these 

final rules. 

Administrative Procedure Act 

The Agencies conclude that because 

the interim rules are in effect and 

recognize an exemption, and the 

Agencies have made no changes in the 

final rules, the rules are exempt from 

the delayed effective date requirement 

of the Administrative Procedure Act. 5 

U.S.C. 553(d). 

OCC and OTS Executive Order 12866 

Statement 

The OCC and OTS have each 

independently determined that the final 

rules are not significant regulatory 

actions under Executive Order 12866. 

OCC and OTS Unfunded Mandates Act 

of 1995 Statement 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 12 requires 

that an agency prepare a budgetary 

impact statement before promulgating a 

rule that includes a Federal mandate 

that may result in the expenditure by 

State, local, and tribal governments, in 

the aggregate, or by the private sector, of 

$100 million or more in any one year. 

If a budgetary impact statement is 

required, section 205 of the Unfunded 

Mandates Act also requires an agency to 

identify and consider a reasonable 

number of regulatory alternatives before 

promulgating a rule. Because the OCC 

and the OTS have each independently 

determined that the rules will not result 

in expenditures by State, local, and 

tribal governments, in the aggregate, or 

by the private sector, of more than $100 

million in any one year, the OCC and 

the OTS have not prepared a budgetary 

impact statement or specifically 

addressed the regulatory alternatives 

considered. Nevertheless, as discussed 

in the preamble, the rules will have the 

effect of reducing regulatory burden on 

certain institutions and foreign bank 

offices. 

Plain Language 

Section 722 of the Gramm-LeachBliley Act (12 U.S.C. 4809) requires the 

Agencies to use ‘‘plain language’’ in all 

proposed and final rules published in 

the Federal Register. The Agencies 

believe the final rules are presented in 

a clear and straightforward manner and 

received no comments on how to make 

the rules easier to understand. 

List of Subjects 

12 CFR Part 4 

Administrative practice and 

procedure, Availability and release of 

information, Confidential business 

information, Contracting outreach 

program, Freedom of information, 

National banks, Organization and 

functions (government agencies), 

Reporting and recordkeeping 

requirements, Women and minority 

businesses. 

12 CFR Part 208 

Accounting, Agriculture, Banks, 

Banking, Confidential business 

information, Crime, Currency, Federal 

Reserve System, Flood insurance, 

Mortgages, Reporting and recordkeeping 

requirements, Safety and soundness, 

Securities. 

12 CFR Part 211 

Exports, Federal Reserve System, 

Foreign banking, Holding companies, 

Investments, Reporting and 

recordkeeping requirements. 

12 CFR Part 337 

Banks, banking, Reporting and 

recordkeeping requirements, Securities. 

12 CFR Part 347 

Authority delegations (Government 

agencies), Bank deposit insurance, 

Banks, Banking, Credit, Foreign 

banking, Investments, Reporting and 

recordkeeping requirements, United 

States investments abroad. 

12 CFR Part 563 

Accounting, Advertising, Crime, 

Currency, Investments, Reporting and 

recordkeeping requirements, Savings 

associations, Securities, Surety bonds. 

Authority and Issuance 

■ For the reasons set forth in the joint 

preamble, the interim rules amending 

12 CFR parts 4, 208, 211, 337, 347, and 

563 which were published at 72 FR 

17798 on April 10, 2007, are adopted as 

final rules without change. 

Dated: September 17, 2007. 

John C. Dugan, 

Comptroller of the Currency, Office of the 

Comptroller of the Currency. 

Board of Governors of the Federal Reserve 

System, September 19, 2007. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this 11th day of 

September, 2007. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

Dated: September 13, 2007. 

By the Office of Thrift Supervision. 

John M. Reich, 

Director. 

[FR Doc. 07–4716 Filed 9–24–07; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P; 

6720–01–P 

SOCIAL SECURITY ADMINISTRATION 

20 CFR Part 416 

[Docket No. SSA–2006–0103] 

RIN 0960–AF99 

Technical Updates to Applicability of 

the Supplemental Security Income 

(SSI) Reduced Benefit Rate for 

Individuals Residing in Medical 

Treatment Facilities 

AGENCY: Social Security Administration. 


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